Making sense of financial aid awards

You’re getting financial aid award letters in the mail, and are anxious to figure out what each school will really cost you—yet no two letters are alike. So how do you make sense of what the bottom line is?

Add up all the costs. This includes tuition, housing, meals, books, supplies, transportation, and fees. Plus if you’re taking out student loans, you’ll want to think about the interest rate you’re paying.

Subtract the aid that the school is offering. This includes grants, scholarships, and any fee waivers.

Check to see if awards are renewable for each year that you’re in school and whether or not they’re guaranteed. Be sure to check the amount of the aid that you’ll receive each year. It’s not uncommon for award values to change in latter years.

Consider the type of aid you’re receiving. If you’re going to be receiving needs-based aid, you’ll need to know what your Expected Family Contribution will be. If your family’s financial situation changes next year, for example, the amount of aid is likely to change.

Subtract non-gift aid. This would be money you earn through a work-study program or loans.

This will give you the net amount that you’ll be expected to pay. With this information in hand, you can more easily compare each school’s offer.